Tag Archives: Alliance

Fairness hearing for Alliance

TORONTO, Alliance Atlantis Communications Inc. today announced that, at its request, the Ontario Superior Court has now scheduled June 15, 2007 as the date on which the Court will hold the fairness hearing in connection with the Plan of Arrangement pursuant to which AA Acquisition Corp. (formerly 6681859 Canada Inc.), a subsidiary of CanWest MediaWorks Inc., would acquire all of the outstanding shares of Alliance Atlantis for $53.00 cash per share. The hearing had been scheduled for May 18, 2007.

Alliance Atlantis, AA Acquisition Corp. and GS Capital Partners VI, L.P. (a private equity affiliate of Goldman Sachs & Co.) have agreed with Movie Distribution Income Fund and its subsidiary trust, Movie Distribution Holding Trust ("Holding Trust"), to reschedule the fairness hearing to this date and have also agreed that the claim by Holding Trust announced in a media release on April 4, 2007 relating to whether Holding Trust’s consent was required in connection with the Arrangement would be heard on the same date.

Holding Trust is the owner of 49% of Motion Picture Distribution LP ("MPD") and it has publicly stated that it believes, based on publicly available information, Holding Trust’s consent is required in connection with the Arrangement. Alliance Atlantis indirectly owns 51% of MPD and previously responded in a media release on April 5, 2007 that it does not believe the Arrangement itself requires Holding Trust’s consent although certain reorganizational steps contemplated by AA Acquisition Corp. may require the consent of third parties.

"We understand that the Holding Trust trustees, AA Acquisition Corp. and GS Capital Partners VI, L.P., with assistance from management of MPD and Alliance Atlantis, continue to engage in discussions" said David Lazzarato, Executive VP and Chief Financial Officer of Alliance Atlantis.

"Delaying the court date permits the discussions to continue. As we expect the arrangement to be completed in July or early August, we continue to believe there is ample time for this process to run its course and we are hopeful that the parties will reach a satisfactory understanding but, of course, we cannot currently predict its outcome."

Alliance accepts 2.3B takeover

TORONTO (CP) _ Ignoring a last-minute veto effort, shareholders of Alliance Atlantis Communications Inc. (TSX:AAC.B) have voted more than 99 per cent to accept a $2.3-billion takeover offer from CanWest Global Communications Corp. (TSX:CGS) and New York investment bank Goldman Sachs.

"That was a squeaker," Alliance Atlantis executive chairman Michael MacMillan said as stockholders laughed after the results were announced at a special meeting Thursday morning.

The major entertainment company said 99.7 per cent of Class A shareholders who voted approved the takeover, amounting to $53 a share, and 99.9 per cent of Class B shareholders approved it.

MacMillan said operating Alliance Atlantis has been "a heck of a long ride" and he felt privileged and proud to have helped run the company, which has been operating for nearly three decades.

"I’m equally proud to be able to sell it for $2.3 billion and to expect that in the future this business is going to grow and to thrive in a new way, in a new configuration," MacMillan said. "I’m very, very optimistic for the future of the business."

Alliance Atlantis and multimedia giant CanWest said the takeover remains on track despite a veto bid by Movie Distribution Income Fund (FLM.UN). The fund said Wednesday evening it is going to court to seek a veto.

At issue is the Motion Picture Distribution Limited Partnership, a major movie distributor in Canada, which is owned 49 per cent by the Movie Distribution Income Fund and 51 per cent by Alliance Atlantis.

The trust said it would file a court application Thursday, seeking an order that the takeover can’t be completed without its consent, and that the trust must be fully informed about the transaction.

"We do not believe the (takeover) arrangement itself requires the consent of the trustees of the fund," David Lazzarato, Alliance Atlantis’s chief financial officer, said earlier Thursday in a release.

"The trustees of the fund apparently believed they needed to take legal steps to preserve the rights of the fund in advance of the special meeting of Alliance Atlantis shareholders … ."

He said the trustees, the management of MPD and the bidders "continue to engage in discussions" and should be able to "satisfactorily address any concerns that the fund’s trustees may have regarding the consequences to MPD from the arrangement."

On behalf of CanWest Global, executive vice-president Tom Strike said the bidders would "continue to pursue a satisfactory resolution with the trustees of the fund and would take whatever legal action it deemed necessary to maximize the likelihood of a timely completion of the arrangement.’

Under the proposed deal, the CanWest will contribute $200 million to the takeover of Alliance Atlantis, whose key assets are 13 specialty TV channels including Showcase, History Television, Slice and Discovery Health. It also owns part of the CSI television crime series.

Goldman Sachs will hold 71 per cent while CanWest will have a 29 per cent stake, aiming to increase its ownership by 2011.

The ultimate ownership split depends on the performance of the combination of the Alliance Atlantis broadcast assets with Winnipeg-based CanWest’s Global TV network.

Alliance, CanWest update acquisition

TORONTO, Alliance Atlantis Communications Inc. and CanWest Global Communications Corp. announced today that they expect that the completion of the Arrangement pursuant to which AA Acquisition Corp. (formerly 6681859 Canada Inc.) ("Acquireco") would acquire all of the outstanding shares of Alliance Atlantis for $53.00 cash per share will occur in July 2007 or early August, 2007.

As previously announced on January 10, 2007, Alliance Atlantis entered into an Arrangement Agreement with Acquireco, a corporation wholly owned by CanWest MediaWorks Inc. ("CanWest"), providing for an Arrangement with Alliance Atlantis. A Special Meeting of shareholders of Alliance Atlantis has been called for April 5, 2007 at 10:00AM (EST) in Toronto, Ontario to consider a special resolution to approve the Arrangement pursuant to section 192 of the Canada Business Corporations Act. A Notice of Special Meeting and Management Proxy Circular (the "Circular") dated March 5, 2007 were mailed to shareholders of Alliance Atlantis and are available on SEDAR at www.sedar.com under Alliance Atlantis’ profile.

CanWest and Alliance Atlantis had anticipated that the preparation and audit of certain of the financial information required by Acquireco in connection with debt financings being undertaken in connection with the Arrangement could be completed in time for a May closing. However, the exercise is taking longer than initially expected and the required information will not be available in time to permit completion of the Arrangement in May 2007.

As a result, Alliance Atlantis will be required pursuant to the Arrangement Agreement to provide more current unaudited financial statements and other information in respect of the first fiscal quarters of 2007 and 2006 in connection with the Acquireco debt financings. This required financial information is expected to be available in late June thereby permitting a July or early August closing.

Given the parties’ expectation as to timing for completion of the Arrangement, Alliance Atlantis currently intends to seek relief from the requirement to hold its annual meeting of shareholders by end of June 2007 so as not to hold such meeting prior to the completion of the Arrangement.

Shareholders should carefully review the Circular which provides more detailed information regarding the Arrangement and how to vote their shares. Shareholders are encouraged to complete, sign, date and return the form of proxy accompanying the Circular so that their shares can be voted at the Special Meeting in accordance with their instructions.

Alliance no longer selling MPD

TORONTO (CP) _ Movie Distribution Income Fund said late Wednesday that Alliance Atlantis Communications Inc. is "no longer interested" in trying to sell Motion Picture Distribution LP outright.

Alliance holds an indirect 51 per cent stake in the Canadian film distribution company, while the fund has a 49 per cent stake.

However, CanWest Global Communications Corp. (TSX:CGS) announced late Wednesday that it had paired up with Wall Street bank Goldman, Sachs & Co. to acquire Alliance Atlantis in a $2.3 billion deal.

Under the proposed deal, a Canadian partner of GS Capital Partners, a private equity affiliate of the New York-based bank involved in the acquisition, would take control of Alliance’s interest in Motion Picture Distribution.

"The special committee of the fund continues to monitor circumstances, including those related to the proposed AACI sale transaction announced today, and their implications on the process to explore ownership alternatives in relation to MPD previously announced by the fund, including its effect on the nature of the transactions that may be available to unitholders of the fund (if any)," Movie Distribution said in a release.

Alliance Atlantis, a specialty broadcaster whose marquee property is the "CSI" TV-series franchise, said last October it wanted to sell its stake in Motion Picture Distribution, a leading movie distributor in Canada with other operations in Britain and Spain.

A few weeks later, Movie Distribution Income Fund said that it would join Alliance Atlantis in putting the distribution business up for sale. Each side needed the approval of the other to sell its interest in the partnership.

Potential buyers have been eyeing the fund since earlier in 2006, with the most talked-about candidate being London-based Marwyn Investment Management LLP, which had said it was prepared to pay about $400 million for the company. A formal offer was never put on the table. Goldman Sachs was another possible suitor.

Alliance Atlantis possible sale

TORONTO (CP) _ Alliance Atlantis Communications Inc., one of Canada’s largest TV entertainment companies, said Friday it’s in talks about a potential sale while Goldman Sachs & Co. and CanWest Global Communications Corp. (TSX:CGS) were reported to have teamed up on an offer.

Alliance said in a release that controlling shareholder Southhill Strategy Inc., owned by Alliance executive chairman Michael MacMillan and Seaton McLean, "is also participating in those discussions.

"There can be no assurance that these discussions will result in a definitive agreement."

The announcement comes after months of rumours that CanWest has been eyeing Alliance, a company best known for its 50 per cent interest in the lucrative "CSI" crime-drama TV franchise. The firm was formally put up for sale in December. Alliance reached a record high of $51.82 Friday morning on the Toronto Stock Exchange after reports of a possible offer. The company closed up $1.22 to $51.20 while CanWest shares rose three cents to $10.74.

Shares in Alliance have climbed steadily since last August on a possible sale. In mid-December the company’s shares rose more than 19 per cent over a week fuelled by analyst reports that predicted an Alliance could be up for grabs soon. On Friday, reports surfaced saying that CanWest and Goldman formed a partnership that would see the Canadian media company buy Alliance’s 13 specialty television channels.

Goldman’s private-equity group is considering either an outright purchase of Alliance’s 50 per cent interest in the lucrative "CSI" crime-drama TV franchise, or a loan to CanWest backed by the "CSI" stake, reports said. Alliance’s rights in the franchise include international distribution for all three series, which has proven to be a major revenue driver for the company.

Together CanWest and Goldman could offer up to C$2.1 billion for Alliance, media reports said. CanWest and Goldman declined to comment Friday. Analysts have said CanWest could shed its Network Ten broadcasting assets in Australia and New Zealand, in which it owns a 56.4 per cent stake, in favour of expanding its television holdings in Canada.

In an investor report released Jan. 3, Westwind Partners analyst Ben Mogil suggested those properties could see a sale or merger by the fall. He said CanWest’s New Zealand operations reported three per cent growth in earnings to NZ$24.3 million, before interest and taxes, in the first quarter. But that translated to a 2.5 per cent decline when converted to Canadian dollars.

The company has also had trouble with its newspaper assets amidst lagging sales across the industry, and shuttered the print version of free daily Dose last year. Analyst estimates previously pegged Alliance’s specialty TV channel division, which includes Showcase and History Television, to be worth up to $1.5 billion.

"CSI" is co-owned by CBS Corp. and is harder to value, but is likely worth between $700 million and $800 million.

In December CBS was rumoured to be interested in snagging the other half of the CSI interests to develop the franchise outside of North America.

Winnipeg-based CanWest and the New York investment bank are not expected to be the only bidders. Astral Media Inc. (TSX:ACM.A) and Corus Entertainment Inc. (TSX:CJR.B) are also preparing bids, sources say, and cable rivals such as Rogers Communications Inc. (TSX:RCI.B) and Quebecor Inc. (TSX:QBR.A) are seen as outside contenders.

Alliance also holds a 51 per cent stake in publicly traded income trust Motion Picture Distribution LP (TSX:FLM.UN). Its portion is worth C$166 million.

Adam Shine, an analyst for National Bank Financial, said in an investors note that while Alliance might prefer to sell the entire company to a single party, he’s "not convinced that they optimize the value of each distinct asset in the process."

He said Goldman would likely acquire Motion Picture Distribution and possibly the stake in "CSI."

Alliance’s announcement ignited criticism from the vice-president of Canada’s largest media union, who called it part of "the dangerous pyramiding of media ownership concentration."

Peter Murdoch, media vice-president of the Communications, Energy and Paperworkers Union of Canada, said he is asking the prime minister and the federal heritage minister to warn large media conglomerates that they’re asking for a tough reaction if they continue to buy each other and create increasingly large companies.

"It is incumbent on Heritage Minster Bev Oda to speak directly to the issue now, before the bidding war gets seriously engaged," Murdoch said.

"Canada already has the dubious reputation of being a world leader in concentrated media."

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